Tyrosyl phosphorylation plays an important role in many cellular processes, and the kinases involved in these events have been well characterized. However, much less is known about the role of protein- tyrosine phosphatases (PTPs). PTP- 1B is a ubiquitous non- transmembrane enzyme which is highly expressed in insulin-responsive tissues. However, the role of PTP-1B in vivo has been unclear. Insulin is the key regulator of glucose homeostasis and fat metabolism. Recent data shows that homozygotic PTP-1B-null mice are insulin sensitive, consistent with the role of PTP-1B as a negative regulator of insulin signaling. An unexpected feature of the PTP-1B-null mice, however, is that they display remarkably low adiposity and are resistant to diet-induced obesity. The hypothalamus plays a central role in the regulation of body weight and energy homeostasis through the action of the metabolic hormones insulin and leptin, as well as through secretion of neuropeptides. I hypothesize that increased insulin and/or leptin sensitivity in the hypothalamus may be responsible for low adiposity and resistance to diet-induced obesity in the PTP-1B-null mice. I plan to address this possibility through a biochemical and genetic approach.